The Canadian Dollar has attracted a lot of attention since yesterday?s inflation number cooled considerably to its 2.2% rate - higher than their target 2% inflation rate.
Canadian wholesales fell by 3.1 percent in April which translates into approximately $42.8 billion. The automotive sector helped drag wholesales down with a decrease of 8.3 percent. This is the biggest drop in Canadian wholesales receipts since August 2003.
http://www.cbc.ca/money/story/2007/06/20/wholesaletrade.html
[I]Source: CBC[/I]
Leading indicators remain stable as a result of improving performance from household spending. Housing starts contributed positive figures of their own, increasing the demand in the housing sector.
http://www.canada.com/nationalpost/financialpost/story.html?id=0f78631e-cbf5-49cb-bf5a-68a9569b39de&k=42725
[I]Source: Financial Post[/I]
Finance Minister Greg Sorbara says he intends to pressure Governor Dodge not to hike rates, as a strong dollar will harm manufacturers. The dollar has already grown significantly because of rising demand for oil, gas, and metals. Governor Dodge is scheduled to give a presentation to the financial ministers today.
http://www.bloomberg.com/apps/news?pid=20601082&sid=aqlgdsCEFotA&refer=canada
[I]Source: Bloomberg[/I]
[B]Currency
[/B]The Canadian Dollar has attracted a lot of attention since yesterday?s inflation number cooled considerably to its 2.2% rate - higher than their target 2% inflation rate. Interest rate futures are pricing in two hikes by year-end. The USDCAD reached as high as 1.0689 today before falling back to its most recently quoted spot at 1.0638.
[B]Equities
[/B]Despite a low wholesales report, Canada?s S&P/TSX opened higher today, driven by insurance companies Sun Life Financial Inc. and Manulife Financial Corp. The two biggest insurers of Canada stock grew by 76 cents and 28 cents respectively. However, by late morning the index was pulled down by higher-than-expected oil and gas inventories that hit energy shares. The index recently was recently quoted at 14,099.21, down 20.28 points.
[B]Fixed Income[/B]
When the market opened today, the Canadian 10-yr took a dive from 95.65 to 95.3. This may have been a reaction to the tight vote that was reported in the BoE minutes earlier this morning. With interest rate hikes pending in England, investor speculation moved to Canada, where they are also hawkish about rate hikes. Canadian interest rate futures have already priced in two rate hikes by the end of the year. As the day progressed, the 10-yr leveled out at its most recently quoted price of 95.36.
